While European politicians debate how to reduce the continent’s reliance on American technology, a growing number of homegrown firms are quietly building alternatives to US giants and expanding at a rapid pace, even as one industry leader warns it could take Europe a century to close the gap with Microsoft alone.
As Europe continues to debate how to reduce its dependence on American technology, a number of companies are already working to build alternatives and are growing quickly in the process, according to reporting by Euractiv. Despite this momentum, the continent has accumulated such deep tech dependency over recent decades that private-sector efforts alone are unlikely to deliver genuine digital autonomy any time soon. One company leader put the scale of the challenge starkly to Euractiv: “If we keep growing like we’re growing, we’ll need a hundred years until we’ve caught up to Microsoft,” referring to the state of Europe’s tech sector as a whole.
A long-running dependency
Europe’s reliance on overseas IT giants has been a source of controversy for years. Concerns have persisted for some time over the ability of US intelligence agencies to access European data, while more recently, a more combative Trump administration has raised fears, according to Euractiv, that the US president could restrict countries’ access to public services by effectively flipping a “kill switch.”
In response, European politicians are now debating new legislation aimed at encouraging governments and businesses across the bloc to buy more European-made technology. The open question, according to Euractiv’s reporting, is whether that shift is actually taking place in practice, beyond the political discussions happening in Brussels.
Signs of momentum among European firms
To explore this question, Euractiv spoke to the leaders of several companies building tangible alternatives to US technology, finding a sector growing at a striking pace and aiming to accelerate further still. Arthur Mensch, chief executive of Mistral, described as Europe’s leading AI company, told journalists in Brussels in June: “We do see some very positive signs.” According to Mensch, governments and companies are increasingly reconsidering where they source their technology from, a shift he said is directing more revenue toward European providers.
Even so, the overwhelming majority of tech revenue in Europe continues to flow to US companies. Mistral is reportedly hoping to generate €1 billion in revenue this year, according to Le Monde. By comparison, Germany’s federal administration alone spent roughly half that amount, around €500 million, on Microsoft licences in a single year, according to reporting by Heise.
Nextcloud’s growth against Microsoft’s scale
Frank Karlitschek, who leads German cloud computing company Nextcloud, is acutely familiar with this imbalance. Nextcloud is building a European workplace suite intended to rival Microsoft 365, and, alongside other European firms including Proton and Open-Xchange, is preparing to release desktop alternatives to widely used productivity tools such as Word, Excel and PowerPoint. Karlitschek told Euractiv this represents a key opportunity to raise the profile of European alternatives, given how much of the working day civil servants across the continent spend inside those familiar pieces of software.
According to Karlitschek, Nextcloud has been growing revenue by between 50% and 80% per year for some time. By contrast, Microsoft grew its own revenue by “only” 15% last year, yet its earnings still swelled to nearly €250 billion, with a workforce exceeding 200,000 employees, a scale Karlitschek likened to that of a Großstadt, or major city.
Karlitschek told Euractiv that this gap weighs on him, saying he is unable to simply enjoy his own company’s success while regional progress toward tech sovereignty remains “simply not enough.” As an example, he pointed to Nextcloud’s recent partnership with one of Germany’s federal states last month, building on the earlier sovereignty push led by the neighbouring state of Schleswig-Holstein. He noted, however, that this still represents just two of Germany’s sixteen federal states.
Demand growing in Italy’s AI sector
Elsewhere in Europe, Italian AI developer Domyn, based in Milan, is working with the country’s government and with companies operating in heavily regulated sectors such as banking. Founder Uljan Sharka told Euractiv the company is aiming to double its headcount of 200 employees within the next few quarters.
Sharka said demand for European-based AI services had been “just amazing” following the US government’s move to restrict foreign access to Anthropic’s Fable model, part of a broader push by Washington to limit international access to leading American AI systems. It is worth noting that access to Anthropic’s Fable model, which was suspended in June 2026 to comply with US export controls, was subsequently restored on 1 July 2026 after those controls were lifted; Sharka’s comments to Euractiv reflect the impact he attributes to the earlier restriction rather than necessarily describing the current state of access.
